Consumer behaviour
Consumer behaviour is the study of how people buy, what they buy, when they buy and why they buy. It is a subcategory of marketing that blends elements from psychology, sociology, sociopsychology, anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics, psychographics, and behavioural variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. Belch and Belch define consumer behaviour as 'the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires'. Basic model of consumer decision making Problem recognition Problem recognition results when there is a difference between one's desired state and one's actual state. Consumers are motivated to address this discrepancy and therefore they commence the buying process. Sources of problem recognition include: * An item is out of stock * Dissatisfaction with a current product or service * Consumer needs and wants * Related products/purchases * Marketer-induced * New products The relevant internal psychological process that is associated with problem recognition is motivation. A motive is a factor that compels action. Belch and Belch (2007) provide an explanation of motivation based on Maslow's hierarchy of needs and Freud's psychoanalytic theory. Information Search Once the consumer has recognised a problem, they search for information on products and services that can solve that problem. Belch and Belch (2007) explain that consumers undertake both an internal (memory) and an external search. Sources of information include: * Personal sources * Commercial sources * Public sources * Personal experience The relevant internal psychological process that is associated with information search is perception. Perception is defined as 'the process by which an individual receives, selects, organises, and interprets information to create a meaningful picture of the world' The selective perception process Stage Description Selective exposure consumers select which promotional messages they will expose themselves to. Selective attention consumers select which promotional messages they will pay attention to Selective comprehension consumer interpret messages in line with their beliefs, attitudes, motives and experiences Selective retention consumers remember messages that are more meaningful or important to them You should consider the implications of this process on the development of an effective promotional strategy. First, which sources of information are more effective for the brand and second, what type of message and media strategy will increase the likelihood that consumers are exposed to our message, that they will pay attention to the message, that they will understand the message, and remember our message. Alternative evaluation At this time the consumer compares the brands and products that are in their evoked set. How can the marketing organisation increase the likelihood that their brand is part of the consumer's evoked (consideration) set? Consumers evaluate alternatives in terms of the functional and psychological benefits that they offer. The marketing organisation needs to understand what benefits consumers are seeking and therefore which attributes are most important in terms of making a decision. The relevant internal psychological process that is associated with the alternative evaluation stage is attitude formation. Belch and Belch (2007, p.117) note that attitudes are 'learned predispositions' towards an object. Attitudes comprise both cognitive and affective elements - that is both what you think and how you feel about something. The multi-attribute attitude model explains how consumers evaluate alternatives on a range of attributes. Belch and Belch (2007) identify a number of strategies that can be used to influence the process (attitude change strategies). Finally, there are a range of ways that consumers apply criteria to make decisions. Belch and Belch (2007) explain how information is integrated and how decision rules are made including the use of heuristics. The marketing organisation should know how consumers evaluate alternatives on salient or important attributes and make their buying decision. Purchase decision Once the alternatives have been evaluated, the consumer is ready to make a purchase decision. Sometimes purchase intention does not result in an actual purchase. The marketing organisation must facilitate the consumer to act on their purchase intention. The provision of credit or payment terms may encourage purchase, or a sales promotion such as the opportunity to receive a premium or enter a competition may provide an incentive to buy now. The relevant internal psychological process that is associated with purchase decision is integration. Post purchase evaluation Once the consumer has purchased and used the product, they will evaluate their purchasing decision. They compare the product's performance with their expectations. If the product does not perform as expected they will experience post purchase dissatisfaction. When consumers purchase high involvement products, that is more expensive products for which they exert a greater purchasing effort in terms of time and search, they usually experience some level of discomfort after the purchase. That is, they experience some doubt that they made the right choice. This situation is called 'cognitive dissonance' (thinking disharmony). You should consider the implications of post purchase behaviour for the marketing organisation. How can the marketing organisation minimise the likelihood of post purchase dissatisfaction and/or cognitive dissonance? The relevant internal psychological process that is associated with post purchase evaluation is learning. according to Belch and Belch (2007) discuss two basic approaches to learning theory behavioural and cognitive learning theory. Behavioural learning theory proposes that stimuli from the environment influence behaviour. Return to top Howard and Sheth's models of consumer behavior Another model of consumer behavior is that of Howard and Sheth. This contains a deal of common sense, although, as is often the case with such models, the rather obscure terminology makes it appear more confusing than it really is. The 'inputs' (stimuli) that the consumer receives from his or her environment are: #significative - the 'real' (physical) aspects of the product or service (which the co make use of) #symbolic - the ideas or images attached by the supplier (for example by advertising) #social - the ideas or images attached to the product or service by 'society' (for example, by reference groups) The 'outputs' are what happens, the consumer's actions, as observable results of the input stimuli. Between the inputs and outputs are the 'constructs', the processes which the consumer goes through to decide upon his or her actions. Howard and Sheth group these into two areas: #perceptual - those concerned with obtaining and handling information about the product or service #learning - the processes of learning that lead to the decision itself The Engel-Kollatt-Blackwell model, as a further example, follows a more mechanistic approach. In the domain of evolutionary economics, consumers are seen as active agents following rules of behaviour, fairly easy to follow and implement because they require only a limited amount of information and capability of elaboration. For instance, a consumer, being aware of a certain need and believing a certain good category satisfies it, might fix a maximum price he/she can afford and search for the best good available under such a constraint. A more detailed description of rules of behaviour, dependent also on consumer's income and social group, is available at http://www.economicswebinstitute.org/essays/consumers.htm. More in general, consumer behaviour models and datasets are available at http://www.economicswebinstitute.org/consumerbehaviour.htm. Such models can help theorists to explain consumer behaviour better, but it can be difficult to put them to practical use. See also *Shopping *Brand names *Brand preferences *Choice modelling *Consumer research *Consumer satisfaction *Consumer surveys *Decision making *New economic order typology *Retailing *Shopping centres References * 'The Theory of Buyer Behavior ' (Wiley, 1969) *J. Engel, D. Kollatt and R. Blackwell, 'Consumer Behaviour ' (Dryden Press, 1978) *D. Mercer, ‘Marketing’ (Blackwell, 1996) * 'Behaviour of Buyer'(T.Ocean 1998) * Belch, G. E., & Belch, M. A. Advertising and Promotion: An Integrated Marketing Communications Perspective,(6 th: New York: NY: McGraw-Hill. 2004) General bibliography *Bilkey, Warren J., "The Vector Hypothesis of Consumer Behavior, Journal of Marketing, Vol. 16, No. 2, Oct., 1951, pp. 137-151. *Chisnall, P.M. (1992), Marketing: A Behavioural Analysis, McGraw-Hill, London. *Davidson, W.R., Bates, A.D., Bass, S.J. (1976), The Retail Life Cycle, Harvard Business Review, Boston, MA. *Grunert, K.C. (1988), Research in Consumer Behaviour: Beyond Attitudes and Decision Making, European Research, Vol. 16. *Hague, D.C. (1977), Managerial Economics: Analysis for Business Decisions, Longman, Harlow. *Howard, J., Sheth, J.N. (1968), Theory of Buyer Behaviour, J. Wiley & Sons, New York, NY. *Karmarck, A.M. (1983), Economics and the Real World, Basil Blackwell, Oxford. *Kim, Soyoung, Littrell, Mary A., "Predicting Souvenir Purchase Intentions", Journal of Travel Research, v.38, November 1999, pp.153-162. *Loudon, D.L. (1988), Consumer Behaviour: Concepts and Applications, McGraw Hill, London. *McNair, B. (1958), Retail Development, Harper & Row, New York, NY. *Nicosia, F.M. (1968), "Advertising management, consumer behaviour and simulation", Journal of Advertising Research, Vol. 8 No.1, pp.29-39. *Schiffman, L.G. (1993), Consumer Behaviour, Prentice Hall International, London. *Schwartz, B. (2004), The Paradox of Choice: Why More Is Less'', Ecco, New York, NY. *Solomon, M.R. (1994), Consumer Behaviour, Allyn & Bacon, London. *Stern, L.W., El-Ansary, A.I. (1992), Consumer Behaviour: An Information Processing Perspective, Prentice Hall, Englewood Cliffs, NJ. *Termorshuizen, J.G., Meulenberg, M.T.G., Wierenga, B., "Consumer behaviour in respect of milk in the Netherlands", European Review of Agricultural Economics Volume 13, Number 1 Pp. 1-22, 1986. *Wansink B. (2006), Mindless Eating: Why We Eat More Than We Think, New York: Bantam Dell. External links * Food and Brand Lab http://www.foodpsychology.cornell.edu * Consumer Behaviour Online * http://futureobservatory.dyndns.org/ Category:Behavior * Category:Consumer research Category:Marketing Category:Economics